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New quantification criteria for damages caused by traffic accidents

Act 35/2015, on appraising personal and property damage caused by traffic accidents, was recently approved and will come into force on January 1 2016.

The first chapter contains general provisions and definitions; the second sets out the rules for evaluating bodily harm, addressing compensation for death, aftereffects (previously called 'permanent injuries') and temporary injuries (set out in Tables 1, 2 and 3, respectively).

In addition to providing a practical update of general damages amounts, the new act seeks to fulfil the legislature's intention to include new appraisal criteria which require the aggrieved to be fairly compensated in an objective manner.

Article 33(2) of the act establishes that the principle of comprehensive relief seeks to ensure that parties receive full compensation for damages incurred – not only for property damage, but also for moral or personal damage.

Article 33 also sets out the principle of structured relief, which refers to the need to evaluate property and personal damage separately and to separate the different categories of damage in order to prevent gaps and overlaps. The practical application of this principle is extensively described in Article 33 and the over 500-page appendix, which lists causes of death, temporary injuries and aftereffects by means of personal damage. These are in turn broken down into basic personal injury, specific personal injury and property damage.

The principle of structured relief is supplemented by the principle of objective appraisal, which is also regulated by Article 33. Article 33 states that compensation must be determined according to the rules and limitations established by the system. As such, compensation cannot be awarded for items or amounts other than those provided for by the act.

Amendments

Compensation

Under the new act, compensation should reflect the damage incurred as closely as possible, so that the aggrieved is not left in a worse situation – both financially and with regard to his or her wellbeing – than he or she was in before the accident.

If the victim is partly at fault, compensation may be reduced by up to 75%. For this purpose, minors under 14 years old are exempt from civil liability.

Duty to mitigate

The act imposes a duty to mitigate damages on the victim. If the victim fails to comply with this duty, the compensation may be reduced by up to 75%. This does not apply to minors under 14 years old in the case of aftereffects or temporary injuries. The act establishes that the victim will be considered to have failed to comply with this duty if he or she fails to carry out any action that – without constituting a risk to his or her health or wellbeing – would have prevented aggravation of the damage (eg, unjustified abandonment of medical treatment).

Aggrievedparties

The following individuals are considered to be 'aggrieved' under the act:

the victim of the accident; and

those set out in Article 62 (ie, surviving spouse, ascendants, descendants, siblings and close friends).

In case of death, the surviving member of a stable couple who meets the requirements set out in Article 36 will also be considered aggrieved.

Claims and statute of limitations

Under the new act, medical reports are now enforceable. Further, aggrieved parties must collaborate with the medical services designated by the liable party in order to monitor any injuries.

The act now obliges the aggrieved to report the accident and submit an extra-judicial claim for damages before submitting a legal claim, including:

any relevant information regarding the party or parties making the claim;

a statement about the circumstances of the incident;

the vehicle and the driver who caused the accident (if known); and

any medical or expert reports that may assist in quantifying the damage.

This communication will interrupt the statute of limitations as soon as it is submitted to the insurer. This interruption will be extended until the aggrieved receives a certified notice of the insurer's final, reasoned offer or reply.

Within three months of receipt of the aggrieved's claim – whether for personal or property damage – the insurer must provide a reasoned compensation offer if responsibility and quantification of the damage are proven in accordance with the established legal provisions. If the insurer fails to do so, or if it rejects the claims, it must still provide a reasoned reply that meets the legally established requirements. Failure to comply with this obligation may constitute a minor or serious administrative infraction.

If three months pass without submission of a reasoned compensation offer due to an unjustified cause, or if this failure is attributable to the insurer, late payment interest will be accrued in accordance with the act. Late payment interest will also be accrued if, after the aggrieved accepts an offer, payment is not provided within five days or the amount offered is not sent.

If the aggrieved does not accept the reasoned compensation offer, the parties – by mutual agreement and at the insurer's expense – may request additional expert reports.

The aggrieved may also request additional expert reports without the insurer's agreement at his or her own expense.

If additional expert intervention is requested, the insurer must provide a new reasoned offer within one month of submission of any additional report and the time limit will be extended in order to complete this action. In all cases, the time limit will be reset to the date on which the aggrieved was made aware of the insurer's rejection of the request to obtain additional reports.

If a disagreement arises after a reasoned offer or reply has been submitted, or if the time limit for issue of a decision has expired, the aggrieved may resort to mediation, as provided for under Article 14. The aggrieved may also resort to appropriate legal means in order to claim corresponding damages.

Complaints that are not accompanied by documents proving submission of the complaint to the insurer and the reasoned offer or reply (if issued) will not be processed. However, there is some leeway around the issue of whether the content of those documents will suffice for the purposes of the procedure.

Damages

The act sets out that damages will be provided for death, aftereffects and temporary injuries. In each case, the following categories of injury will be considered:

In case of death, both basic and specific personal injury will be treated according to the aggrieved's connection with the deceased and the category that he or she falls under. These categories are:

surviving spouse;

ascendants;

descendants;

siblings; and

the new 'close friends' category, which is defined as individuals who, although they are not considered aggrieved, lived closely with the deceased for at least five years immediately before the death and were especially close to the deceased in kinship or affinity (Article 62).

Basic property damage is understood as fixed direct damages for general expenses caused by the death (eg, travel, room and board and other similar costs). Compensation will be provided in the amount of €400, in addition to specific costs, including transport of the deceased, repatriation, burial and funeral expenses.

Compensation also includes an appraisal of consequential damages which, in case of death, consist of the net loss suffered by those financially dependent on the deceased's income.

Basic personal injury is always compensated for aftereffects. In order to do so, two scales are used: the medical scale and the financial scale, both of which are described in the relevant tables.

The medical scale contains a list of aftereffects that relate to permanent psycho-physical harm, including the description, classification and measurement of each type of harm. Further, it includes a special chapter dedicated to disfigurement.

Psycho-physical harm and disfigurement are measured by harm points, with a maximum of 100 points for psycho-physical harm and 50 points for disfigurement. Ratings are calculated as either a fixed number of points or a range of points.

As in the previous system, aftereffects should be measured only once, even if they appear in various categories of injury. Further, aftereffects that are included in or arise from other injuries cannot be appraised, even if they are described independently.

In addition, as in the previous system, analogous application is permitted only for aftereffects not included in the medical scale and for those that maintain the Balthazar formula for concurrent aftereffects, with some changes to its application. Additionally, Article 99 defines a new concept of 'inter-aggravating aftereffects'.

Specific personal injury includes:

moral damages caused by psycho-physical damage;

moral damages caused by disfigurement;

damages for loss of quality of life caused by aftereffects (which is also considered moral harm) – a scale of severity (ie, very severe, severe, moderate and mild) is used; and

damages for loss of quality of life of family members due to major injuries.

The chapter also divides property damage into direct damages and consequential damages.

Temporary injuries

As in the previous system, these damages are compatible with those relating to death or aftereffects.

Temporary injuries are still based on basic personal injury, specific personal injury and property damage (direct damages and consequential damages).

The system eliminates the classic distinction between days hospitalised, lost working days and worked working days.

'Basic personal injury' is defined as the harm suffered from the date of the traffic accident until the end of the healing process or stabilisation of the injury and its conversion, when applicable, into aftereffects. It is appraised by means of a daily amount listed in the tables. Compensation for what were previously described as 'healing days without loss of work' is now set at €30 per day.

Specific personal injury is divided into two categories: damages for temporary loss of quality of life and damages caused by surgical intervention.

Comment

In addition to amending the scale of compensation Act 35/2015 not only has repercussions in relation to extra-contractual civil liability arising from traffic accidents, but also serves as a guideline for setting damages in other areas of extra-contractual and contractual liability. It remains to be seen whether its apparently unclear aspects will streamline the process of claiming damages in order to increase friendly and extra-judicial transactions and reduce litigation in this area.

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